Australia

Coalition, Labor to talk tax cuts as Scott Morrison returns from holiday

Prime Minister Scott Morrison is back from holiday sunshine to face some signs of a gloomy economy. Source: AAP

Prime Minister Scott Morrison has returned from a family holiday, ready to talk about personal income tax cuts.

Refreshed from a family holiday in Fiji and a night out watching the State of Origin in Perth, Scott Morrison will swing back into action by talking about the economy.

The prime minister has stayed in Perth to deliver a breakfast speech to the Western Australia Chamber of Commerce on Monday - a business group he describes as having "ticker" and one that is prepared to put its case better than most.

He will use his first major economic speech since the election to put pressure on Labor to back the government's three-stage personal income tax plan in full.

"Our job post election is now very clear - to get Australians off the economic sidelines and on the field again," he says in a draft of his speech obtained by AAP.

So far the opposition is only prepared to support the first stage of the tax plan which is aimed at low and middle income earners, rather than future reductions that don't start until 2022 and 2024.

"It still baffles me why Labor can readily sign up to spending schemes that run for decades, yet cannot do the same to let Australians keep more of their own money," Mr Morrison will say.

Under the changes from 2024/25, 94 per cent of Australians will pay a marginal tax rate of no more than 30 cents in the dollar, compared to only 16 per cent if stages two and three are not delivered.

"Or to put it another way, almost 80 per cent of hard working Australians will keep more of what they earn following stages 2 and 3 of our tax plan."

Morrison Parliament
Prime Minister Scott Morrison and Treasurer Josh Frydenberg
AAP

The plan will be submitted to parliament next week when it sits for the first time since the election.

Noting the call from Reserve Bank governor Philip Lowe to drive economic growth in the longer term, Mr Morrison will be further lifting the government's game in supporting infrastructure projects.

He says Deputy Prime Minister Michael McCormack will be ensuring the government leads by example with a "single minded focus" on implementing its $100 billion infrastructure investment program.

This will increase Commonwealth support for transport infrastructure by about a third by funding nationally significant transport projects across all states and territories.

But he says congestion is not just on the roads and in the cities.

"We must bust regulatory congestion, removing obstacles to business investment," he says.

That is why he is asking Ben Morton, the assistant minister to the prime minister, to tackle the full suite of barriers to investment in key industries and activities with help from Treasurer Josh Frydenberg and other ministers.

The focus will be on regulation from the viewpoint of business to help identify the regulations and bureaucratic processes that impose the largest costs on key sectors of the economy and the biggest hurdles to letting those investments flow.

"I urge the business people in this room and around Australia to engage with the process," he will say.

Labor's shadow cabinet will meet on Monday to discuss the tax cut package.

Jim Chalmers
Shadow Treasurer Jim Chalmers is pressuring the coalition government to split its tax cuts bill.
AAP

But it may not be until the Labor caucus meets next week - when parliament sits for the first time since the election - that the opposition will make its final decision on how it will approach the three-stage plan.

Shadow treasurer Jim Chalmers says Labor's highest priority is to get the first stage of the tax plan passed so that low and middle income earners get relief in the face of a slowing economy.

However, Labor still wants answers to stage three of the plan which comes at a cost of $95 billion in five years time and what it will mean for the budget and the economy.

Dr Chalmers says the government has already broken its promise to introduce stage one of the plan by July 1.

"The legislation doesn't come in for another 11 days or so because the government broke that original promise, and so we will take the time to consider it," he told the ABC's Insiders program on Sunday.

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